Industry KPIs · grandfather-rules
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How do you handle grandfathering rules when legacy reps depart?
Grandfather Rule Exit Mechanics
Direct: Grandfather rights are personal, not territorial—when rep exits, rights retire with them. New hire ≠ assume grandfather.
Grandfathering must be strictly reps-based (not seat-based or territory-based). If AE Sarah was grandfathered to 2026 H1 plan and departs, her replacement David inherits current plan, not her carve-outs. Bridge Group data: mishandled handoffs create 8+ weeks of peer conflict as new rep challenges payout fairness.
Grandfather + Departure Scenarios
- Rep resigns with pending deal: Old plan payout applies if deal closes within 90d. Beyond 90d = new rep assumes; if new rep didn't contact account, forfeit = proceeds to manager bonus pool.
- Rep terminated for cause: Grandfather rights may cease immediately; depends on legal + intent. Consult counsel before communicating.
- Rep transferred (internal): If moving from Sales to CSM, grandfather ends on effective transfer date. Prevents abuse (reps chasing old rates across orgs).
- Rep promoted (same org): Grandfather continues on legacy cohort rate until natural expiration. New expanded territory = grandfather applies to old territory only.
Departure Process
flowchart TD
A[Rep Departure Announced] --> B{Grandfather Active?}
B -->|Yes| C[Notify Finance + Rep]
B -->|No| D[Standard offboard]
C --> E{Deals in Flight?}
E -->|Yes - Within 90d| F[Old plan pays out on close]
E -->|Yes - Beyond 90d| G[New rep + new plan from day 1]
E -->|No| H[Grandfather expires, seat resets]
F --> I[Document payout in CRM]
G --> I
H --> I
I --> J[Archive grandfather record]
Governance
| Trigger | Action | Owner |
|---|---|---|
| Resignation + deal pending | Legal review (if $500K+) | GC |
| Termination for cause | CRO decides retention of rights | CRO |
| Internal transfer | Finance vests new territory under new plan | Finance |
| Promotion | Grandfather stays on old base, new territory = new plan | Manager |
Force Management note: Reps will test grandfather boundaries; explicit written policy in offer letters prevents disputes. Verbal approvals = $20K-100K in comp litigation.
Vendor practice: Pavilion audits flag "orphaned grandfather clauses" where departed reps' rates linger unpaid because nobody owns the payout. Clean them before they fester.
Key: Grandfather is earned, not transferred. Design terms into offer letters from hire Day 1.
TAGS: grandfather-rules,rep-departure,handoff,comp-governance,attrition,legal-risk
Primary References
- Pavilion Executive Compensation Research: https://www.joinpavilion.com/research
- Bridge Group "Sales Development Metrics": https://www.bridgegroupinc.com/research
- OpenView Partners "PLG Index": https://openviewpartners.com/blog/category/product-led-growth/
- SaaStr Annual State-of-the-Industry survey: https://www.saastr.com/saastr-annual/
- Forrester B2B Buyer Studies: https://www.forrester.com/research/b2b/
- U.S. BLS — Sales & Related Occupations: https://www.bls.gov/ooh/sales/
Cited Benchmarks (Replace Generic %s)
| Claim category | Verified figure | Source |
|---|---|---|
| B2B SaaS logo retention (yr 1) | 78-86% | OpenView |
| B2B SaaS revenue retention (yr 1) | 102-109% NRR | Bessemer |
| SMB SaaS revenue retention (yr 1) | 88-96% NRR | OpenView |
| Enterprise SaaS retention | 115-128% NRR | Bessemer |
| Inbound MQL-to-SQL | 18-25% | OpenView PLG |
| BDR-to-AE pipeline contribution | 45-60% | Bridge Group |
| AE-sourced vs SDR-sourced deal size | 1.6-2.1x larger | Pavilion |
| MEDDPICC cycle compression | 18-28% | Force Management |
| SDR ramp to productivity | 3.5-5 months | Bridge Group 2025 |
The Bear Case (Capital Markets & Funding)
Three funding risks:
- Valuation compression — public SaaS multiples ranged 4-18× in 5yrs. Future compression to 3-5× changes exit math.
- Venture funding tightening — Series B+ harder per Carta. Longer fundraises, tougher dilution.
- Strategic-acquisition window — large acquirer M&A appetites cyclical. 2023-2024 paused; continued pause limits exits.
Mitigation: $1.5+ ARR/$ raised, default-alive at 18mo, 2+ exit optionalities.
See Also (related library entries)
Cross-references for adjacent operator topics drawn from the current 10/10 library set, ranked by tag overlap with this entry:
- q9502 — How do you scale a workshop-led senior tech-training business in 2027 — what's the proven path past the single-operator ceiling?
- q9559 — How should a CRO calibrate qualification rigor when cash position and runway are forcing a choice between conservative organic growth and ag
- q9558 — What's the framework for a CRO to decide whether to build two separate sales motions (organic vs M&A/upmarket) with distinct qualification r
- q9557 — When a founder-led company has strong product-market fit but weak sales discipline, is the root cause almost always qualification/champion v
Follow the q-ID links to read each in full.
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Bridge Group researchBridge Group researchForce Management comp policyForce Management comp policyPavilion auditsPavilion audits⌬ Apply this in PULSE
Rep Scheduling MatrixProtect high-value selling timeDeep dive · related in the library
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